In its case, the index has rallied atop the September low, and this area remains a technical bull-bear inflection point.

And like the S&P, the Nasdaq Composite has failed its first test of major resistance.

The specific level holds around the 4,500 mark, an area better illustrated on the daily chart below.

Widening the view to six months adds perspective.

On this wider view, three inflection points should be familiar. Specifically:

Nasdaq resistance at its breakdown point of 4,485.

The Nasdaq’s 50-day moving average, currently 4,496.

Resistance at the mid-September low of 4,500

The index topped Monday at 4,496 — matching the 50-day— and has initially drawn sellers in this area. Its technical bias points lower pending a close atop the 4,500 mark.

Moving to the Dow, it remains slightly stronger than the other benchmarks. Two inflection points stand out:

The Dow’s 50-day moving average, currently 16,925.

The September low of 16,934.

Though the index has notched consecutive closes atop this area, broadly-based weakness elsewhere is a concern.

And the S&P 500 Index has failed the U.S. markets' headline technical test. Consider two inflection points:

The S&P’s 50-day moving average, currently 1,975.

Resistance at the mid-September low of 1,978.

Again, the S&P topped Monday at 1,977.8, and has initially drawn sellers at resistance.

The bigger picture

On one level, the bigger-picture technicals are unusually straightforward. The S&P 500 and the Nasdaq Composite have failed their first tests of major resistance.

But even beyond the widely-tracked benchmarks, consider the following:

Returning to the small-caps, the iShares Russell 2000 ETF
IWM, +0.35%
has extended its downturn, plunging to challenge the year’s worst levels.

The ensuing rally attempt has been driven by decreased volume, and the shares have closely observed the breakdown point as resistance. This is bearish price action, as detailed last week, and the group’s path of least resistance points firmly lower pending technical repairs.

More notably, the SPDR S&P MidCap 400
MDY, +0.21%
has violated its 200-day moving average, raising the flag to a primary trend shift.

Its downturn technically resolves a bearish double top — the “M” formation, defined by the July and September peaks — though ideally, incremental follow-through would confirm the formation.

The MDY’s 200-day currently rests at 250.4, and a close higher would stabilize its backdrop.

And perhaps most importantly, the October downdraft has been driven by a volume spike, combined with sharply negative market breadth.

In fact, the initial breakdown was punctuated by two 6-to-1 down days on the NYSE across a narrow five-session window. (A “down day” means that down volume surpassed up volume by the given margin.)

So all told, the October downdraft has inflicted damage. Major technical levels have been violated, and the downturn has been broadly-based.

As for downside targets, the S&P’s 200-day moving average currently rests at 1,904, matching support at the August low. The October downturn’s aggressiveness improves the chances of an eventual retest.

Conversely, the S&P resistance holds at 1,978, and a sustained break higher would stabilize its backdrop.

Tuesday’s Watch List

The charts below detail names that are technically well positioned. These are radar screen names — sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.

Still, this week’s rally attempt has been punctuated by decreased volume, raising a technical caution flag. Looking ahead, the group’s 50-day moving average roughly matches the breakout point, and its response to this area remains a useful bull-bear gauge.

Though near-term oversold, and due a corrective bounce, its straightline downdraft is longer-term bearish. The group’s first retest of the breakdown point would be expected to draw sellers.

Separately, the iShares U.S. Real Estate ETF
IYR, +0.85%
has plunged to its 200-day moving average, and stuck there.

Though the group has demonstrated very near-term resilience — avoiding a “lower low” this month — significant resistance rests at its breakdown point. A close atop this area would mark an early step toward stabilization.

Beyond the U.S. markets — Europe and China

Beyond the U.S. markets, the iShares Europe ETF
IEV, +0.10%
has plunged to 11-month lows.

Its breakdown point now marks resistance, and the first rally to this area would be expected to draw sellers. Also note that the group’s 50-day moving average (in black) has marked a useful intermediate-term trending indicator.

Meanwhile, the iShares China Large Cap ETF
FXI, +0.02%
has survived a recent test of its 200-day moving average.

Still, the subsequent rally attempt has been driven by lighter volume, and the shares have balked at gap resistance, roughly matching the breakdown point. This area would be expected to draw sellers on the first retest.

This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column, including 100 technical stock picks every month, click here.

Still well positioned

The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.